By PP Thimmaya
SAP, the $20-billion German enterprise software maker, plans deeper engagement with technology startups in India by investing in these firms. The strategy is expected to be unveiled in a couple of months’ time.
Talking to FE, Bernd Leukert, member of the executive board – products & innovation, SAP, said “The amount of money to be invested in startups is not yet decided but we will definitely do it this year.”
SAP joins a list that has global technology companies like Google, Microsoft and Cisco, which have a dedicated focus on Indian startups either through investments or by providing software expertise and other programmes. SAP, which has its second largest research & development (R&D) centre in Bengaluru after its Germany headquarters, is keen to engage with the Indian startup community.
According to Leukert, there was huge demand from technology startups and SAP wants to be a technology enabler for these firms. “Startups can be creative in adding their new business ideas and applications on top our technology platforms which is mutually beneficial to both of us,” he remarked.
The technology MNC has been rapidly changing its business model, moving away from a proprietary, software sale model to a cloud-based open standard platform that will allow more diverse applications. Leukert said, “The biggest change for SAP is an open platform where we provide complete functionality to as many customers, partners and even competitors.”
Momentum in the Indian startup space has been picking up, with around 800 firms set up every year. According to Nasscom, Indian IT’s trade body, the country is home to 3,100 startups. This figure is likely to treble to over 10,000 in another five years, employing 250,000 people.
SAP also has other startup programmes in its portfolio. Its ‘Startup Focus’ is a global programme to help promising startups in the big data, predictive and real-time analytics space to develop new applications on its HANA technology platform.
Besides, it also has a venture capital arm, Sapphire Ventures, with around $1-billion corpus. The arm usually invests in mid- to late-stage companies that have a minimum revenue of $2 million.
Cisco, the global networking product major, has also set aside a fund of $40 million to invest in startups. On the company’s startup strategy for India, Padmasree Warrrior, CTO, had told FE, “We not only invest in them but sometimes we also mentor them. When we invest in a company we do it for two reasons: first, it has to align with our strategy. Second, we look for a new area where we see opportunity for innovation.”